Capitol Updates

CAPITOL UPDATE – June 7, 2019

2019 Sine Die Legislative Report

The Nebraska Legislature adjourned its 2019 session on Friday, May 31. The Legislature introduced 739 legislative bills this year and passed 257 bills, including two bills (LB472 and LB492) that passed notwithstanding objections by the Governor, and three bills (LB436, LB470 and LB533) that were vetoed but not overridden. The Legislature indefinitely postponed 38 bills and withdrew 3 bills. A total of 436 bills will carry over and may be considered during the upcoming 2020 session.

Two constitutional amendment resolutions were approved for inclusion on the 2020 General Election ballot. LR1CA would eliminate slavery or involuntary servitude as a punishment for crime. LR14CA would authorize municipalities to pledge property taxes through TIF projects for up to twenty years if more than one-half of the property in a redevelopment project is extremely blighted. Both resolutions were introduced by Sen. Justin Wayne of Omaha.

State Budget and Increased State Aid to Education

LB294, the state’s biennial budget of $9.3 billion, was signed by Gov. Ricketts without any line item changes. The Legislature funded state aid to education at a 3.6 percent per year average increase, $64.8 million (6.7 percent) in FY2019-20 and an additional $5.7 million (0.6 percent) in FY2020-21. Overall, spending for state aid totaled $1.036 billion for FY2019-20 and $1.043 billion for FY2020-21. To see the 2019-20 state aid calculation for your school district, click here.

The final budget incorporated the provisions of LB675 that changed the state aid formula by reducing the allowable growth rate from 2.5 percent to 2 percent for FY2019-20 only. The rate will return to the current level in FY2020-21. This change lowered the previously required first-year biennium budget growth of state aid from 7.8 percent to 6.7 percent and reduced the aid by $11.7 million in FY2019-20 and $12.9 million in FY2020-21.

The budget also included $228.79 million in special education reimbursement for FY2019-20 (1% increase, $2.27 million), and $231.08 for FY2020-21 (1% increase, $2.29 million). Educational service units core services funding will be $9.96 million for FY2019-20 and $10.16 million for FY2020-21.

Comprehensive Property Tax Reform Delayed in Favor of Credit Increase

Senators failed to reach consensus on a solution that would significantly reduce property taxes while protecting education funding and other essential public services. Nebraska’s current tax structure relies heavily on local property taxes to fund K-12 education. About 72 percent of Nebraska school districts do not receive any state equalization aid, leaving those school districts to rely solely on property taxes for funding. Even state aid for equalized school districts fails to keep pace with the funding necessary to address rapid student population growth and poverty in larger school districts.

There were three competing proposals to reduce property taxes: LB289 by Sen. Lou Ann Linehan; LB314 the Nebraskans United Proposal supported by NSEA; and AM1962 to LB183, by Sen. Tom Briese. All failed to advance. Instead, the Legislature appropriated an additional $51 million to the state’s Property Tax Relief Fund. This represents a 23% increase to the existing $222 million annual fund used to offset local property taxes.

Moving Forward on Student Behavioral Health Issues

LB619, by Sen. Rick Kolowski, requires coverage under insurance policies for mental health services provided in schools or in an educational setting. The newly enacted law provides that an insurer offering a health insurance policy shall not deny coverage or payment for a mental health service solely because the service is delivered in a school.

The change will enable a student receiving mental health therapy to miss less time in the classroom, because the provider will be able to come to the student rather than the student travelling back and forth from the provider’s office. Some school districts already have infrastructure in place to allow third party providers to come into the school building and deliver therapeutic services. However, the practice is not consistent across the state.

The law covers health insurance policies issued or renewed on or after January 1, 2020, and to claims for reimbursement based on such policies for costs incurred on or after January 1, 2020.

Changes in Nebraska Civics Education Guidelines

The Legislature passed new civics education guidelines in LB399, introduced by Sen. Julie Slama. It changes Nebraska's 1949 Americanism statutes. The new language is considered an improvement by the Nebraska Department of Education over current language that was last updated in 1971. The changes include the elimination of the class III misdemeanor penalty, which made it a crime under state law for school employees to violate the Americanism provisions, with a possible punishment of up to three-months in jail and/or a $500 fine.

Specifically, the law requires school districts to choose at least one of three options to incorporate in the district's curriculum. These options are: 1) administer the naturalization test used by United States Citizenship and Immigration Services to students once before the completion of eighth grade and again before the completion of twelfth grade; 2) require that the student attend or participate in a meeting of a public body and subsequently complete a project or paper discussing what the student learned; or 3) require that the student complete a project or paper and a class presentation between eighth grade and twelfth grade on a person, persons or event commemorated by a national holiday covered by the law.

Omaha School Retirement Plan Study Adopted

LB31, introduced by Sen. Mark Kolterman and adopted into law, requires the Public Employees Retirement System (PERB) in consultation with Nebraska Retirement Systems Committee, Omaha School Employees Retirement System (OSERS), Omaha Public Schools and other stakeholders to prepare a work plan that identifies the tasks, process, costs and timeline involved in transferring management of the OSERS Plan to the PERB.

The Work Plan requires a comparison of the annual OSERS administration costs to the estimated cost for the PERB to manage the OSERS plan. The bill specifies that management transfer does not include a merger or consolidation of OSERS with the School Plan nor does it include assumption of liability for the unfunded balance by the State of Nebraska.

Private School Funding Proposal Fails to Advance

Tax credits for private school scholarship donations in LB670, introduced by Sen. Lou Ann Linehan, would have provided a 50% tax credit to individuals who donate to scholarship programs for private K-12 schools. It was the second year in a row such a plan failed to advance in the Legislature.

While LB670 was advertised as an effort to help low-income families, the eligibility criteria in the bill would have allowed students from a family of four with a $93,000 income to be eligible, which is significantly higher than other public assistance program limits. The tax credit was capped at $10 million in the first year but if 90 percent of the credit was used, then the cap could grow by 25 percent each of the following years. Assuming the credit would grow each year, then the credit could have reduced state revenues by more than $93 million annually by 2030.

American Dream and Promise Act Passes

Thank you for your many calls and emails to Nebraska Second District Congressman Don Bacon regarding this week’s U.S. House vote on the American Dream and Promise Act of 2019 (H.R. 6). Your outreach made a huge difference as Congressman Bacon voted in favor of the Act!

H.R. 6 provides a pathway to citizenship for nearly 2.7 million Dreamers (those brought to the U.S. as minors), Deferred Action for Childhood Arrivals (DACA) recipients, and Temporary Protected Status (TPS) holders. Those who would benefit include students in our classrooms, our friends, neighbors – and an estimated 37,000 educators working in public schools across the nation.

Final Review of Education and School Finance Bills

Now that the Legislature has adjourned for 2019, all bills not indefinitely postponed will carry over to the 2020 Legislative Session starting in January. Any 2019 prioritized bills will lose their priority status and, unless re-prioritized, will be taken up in their regular order behind advanced 2020 legislation. The full list of senator, committee and speaker priority bills is available here.

APPROVED BY GOVERNOR

LB6 (Blood) Change residency provisions for persons on active duty and dependents for college tuition

LB15 (Blood) Adopt the Children of Nebraska Hearing Aid Act

LB31 (Kolterman) Provide for a study on the transfer of management from OSERS to NPERS

LB32 (Kolterman) Change defined contribution benefit investment options

LB33 (Kolterman) Change provisions relating to retirement, Nebraska Investment Council, and PERB

LB103 (Linehan) Change the procedure for setting a political subdivision's property tax request

LB115 (Blood) Change provisions related to enrollment of children of members of the military

LB122 (Crawford) Change postsecondary residency requirements for veterans, family, and other persons

LB180 (Bolz) Change program eligibility under the Community College Gap Assistance Program Act

LB256 (Arch) Authorize participation in insurance coverage for members of a community college board

LB281 (McCollister) Provide for posting of a toll-free number set up to report child abuse or neglect

LB390 (Pansing Brooks) Provide duties regarding school resource officers and security guards

LB399 (Slama) Change the name and provisions related to the committee on Americanism

LB430 (Groene) Change dates related to certifications and distributions of state aid to schools

LB470 (La Grone) Provide a tax deduction relating to the Nebraska educational savings plan trust

LB486 (Lowe) Adopt the Veteran and Active Duty Supportive Postsecondary Institution Act

LB575 (Brewer) Require school district policies regarding access by military recruiters

LB619 (Kolowski) Require coverage under insurance policies for mental health services in schools

LB675 (Groene) Change provisions relating to education

SELECT FILE

LB183 (Briese) Change the valuation of agricultural land and horticultural land for purposes of taxes

GENERAL FILE

LB147 (Groene) Change Student Discipline Act to provide physical intervention or removal for behavior

LB289 (Linehan) Change provisions relating to taxation of real property

LB483 (Erdman) Change the valuation of agricultural land and horticultural land

LB515 (Vargas) Change provisions relating to the Student Discipline Act

LB534 (Cavahaugh) Require public postsecondary educ. institutions to conduct sexual assault survey

LB544 (Linehan) Adopt the Meadowlark Scholarship Act

LB547 (Wishart) Create the College Savings Plan Matching Grant Program

LB670 (Linehan) Adopt the Opportunity Scholarships Act and provide tax credits

LB720 (Kolterman) Adopt the ImagiNE Nebraska Act and provide tax incentives

REMAINS IN COMMITTEE

LB27 (Kolterman) Change provisions related to the use of proceeds from community college levies

LB36 (Kolterman) Redefine creditable service, change a payment deadline for creditable service

LB73 (Erdman) Require display of the national motto in schools

LB104 (Linehan) Change distribution of the Nebraska Education Improvement Fund

LB120 (Crawford) Require teacher and school staff to receive training on behavioral and mental health

LB165 (Hunt) Adopt the Too Young to Suspend Act

LB182 (Bolz) Adopt the School District Local Option Income Surtax Act

LB241 (Bolz) Provide teacher mentoring grants using income from solar and wind on school lands

LB251 (Walz) Adopt the Child Hunger and Workforce Readiness Act

LB314 (Briese) Adopt the Remote Seller Sales Tax Collection Act and change revenue provisions

LB343 (Halloran) Authorize schools to allow employees to carry concealed handguns

LB346 (Wishart) Change special education reimbursements

LB350 (Morfeld) Provide a budget exception for expanded learning opportunity programs

LB351 (Morfeld) Provide for school district levy authority for cybersecurity and violence prevention

LB358 (Walz) Change provisions related to early childhood education in TEEOSA

LB416 (Friesen) Change distribution of funds from the temporary school fund and from fines and licenses

LB431 (Groene) Change school finance base limitation and local effort rate provisions

LB432 (Groene) Include tax-increment financing valuation in adjusted valuations for TEEOSA

LB491 (Wayne) Authorize punitive damages as prescribed

LB495 (Wayne) Provide for collection of data on student disciplinary actions

LB497 (Friesen) Adopt the School District Property Tax Authority Act and change revenue provisions

LB513 (Briese) Change requirements for the issuance of certain school district bonds

LB537 (Lathrop) Change provisions regarding performance of a certificated school district employee

LB563 (Bolz) Adopt the Access College Early Tech Promise Program Act

LB565 (Bolz) Designate beneficiary determination under certain retirement systems

LB568 (Morfeld) Provide mental health first aid training for school districts and change lottery funds

LB588 (Stinner) Change the local effort rate pursuant to the TEEOSA

LB614 (Crawford) Change revenue and taxation provisions

LB639 (Stinner) Adopt the H3 Careers Scholarship Act

LB640 (Howard) Include study relative to the Holocaust and other genocides to multicultural education

LB647 (Wayne) Include virtual school students in the state aid to schools formula

LB650 (Wayne) Adopt the Teach for Nebraska Program Act and change provisions

LB656 (Wayne) Adopt the Nebraska Education Formula, terminate TEEOSA, and change levy limits

LB662 (Friesen) Terminate the Tax Equity and Educational Opportunities Support Act

LB668 (Vargas) Adopt the Alternative Certification for Quality Teachers Act

LB671 (Linehan) Provide for sparsity aid in the Tax Equity and Educational Opportunities Support Act

LB674 (Linehan) Change the base limitation for school districts

LB677 (Groene) Change the Property Tax Credit Act and provide school district property tax relief aid

LB679 (DeBoer) Create the School Financing Review Commission

LB683 (Kolterman) Provide for a study relating to a one-time lump sum payment to OSERS members

LB685 (Lathrop) Prohibit the denial or delay of a remedy by due course of law as prescribed

LB695 (Groene) Change provisions for the Tax Equity and Educational Opportunities Support Act

LB702 (Cavanaugh) Adopt the Campus Safety Act

LB706 (Lindstrom) Authorize a one-year freeze of cost-of-living adjustments for OSERS retirees

LB710 (Cavanaugh) Change provisions for tobacco including a tax increase, and distribution of funds

LB725 (Walz) Provide for reimbursements to school districts and ESU’s for mental health expenditures

LR5CA (Brewer) Constitutional amendment to limit the percentage of funding for schools

LR8CA (Linehan) Constitutional amendment to limit the total amount of property tax revenue raised